Fears for Vauxhall jobs as GM talks fail

The future of thousands of British workers at Vauxhall remains in doubt today after the collapse of all-night talks in Berlin to decide on the carmaker's new owner.

Under threat: Staff at the Vauxhall car plant in Luton.

The German Government had been due to name its preferred bidder for Vauxhall/Opel, the European arm of beleaguered US giant General Motors (GM) in a move which will affect 5,000 jobs at Vauxhall's UK factories in Luton and Ellesmere Port.

But eight-hour talks involving top-level figures including German Chancellor Angela Merkel broke down after GM asked Berlin for an emergency loan of €300m (£260m).

German Economics Minister Karl-Theodor also announced that one of the three bidders, US investor Ripplewood Holdings, had pulled out.

Both remaining contenders - Fiat and Canadian car parts maker Magna International - need more information from GM and the US Treasury before a recommendation can be made, he said.

There are fears Berlin, which still hopes to reach agreement tomorrow, could give in to election-year pressure with a pledge to protect jobs in Germany - where Opel employs 25,000 - at the expense of those in Britain.

Mr Guttenberg said the German Government does not yet have the security to make billions of euros worth of loan guarantees as part of a deal.

Lord Mandelson yesterday acknowledged British jobs could be lost along with others in GM's European operations in a 'consolidation' exercise as the US carmaker battles to avoid bankruptcy.

It also emerged the Business Secretary has spoken with the main bidders about their commitment to continued production here, offering to consider 'financial underwriting' of any new arrangements.

Downing Street's efforts on behalf of British Vauxhall workers came under fire last night from trade unionists.

Unite's joint general secretary Tony Woodley said: 'If you are asking me, "Is this Government physically, genuinely, actively doing enough?" then the answer is definitely no.'

He warned: 'There is no bidder who won't at the end of the day close plants somewhere. And there is no bidder who won't require billions of euros, of pounds, from governments to keep this new company going and alive.

'That is why it is so crucial that we don't sit back on the sidelines allowing the German Government or somebody else to look after our plant's interests.'

Speaking after the meeting broke up, Mr Woodley said the UK government needed to be at the negotiating table in Germany or British workers could bear the brunt of any potential job cuts.

He said: "The most important thing for me is that our government are not just calling on the phone, but they are also at the negotiating table themselves. If we are not...common sense tells you the axe will fall outside Germany, outside Spain and outside Belgium.The Government has got to do more."

Lord Mandelson rounded on the union chief, saying: 'I have been working very hard for the last three or four months on the issue of General Motors' future in Europe.

'I haven't had a single conversation with Tony Woodley during that time and he has showed no interest at all in the issue.

'He now realises that we are coming up against a crucial deadline for Opel in Germany and has now decided to jump into the television studios and sound off against me.'

Pressure to agree on a partner is now high, with GM heading rapidly for Monday's restructuring deadline set by Washington DC, which could lead to a Chapter 11 bankruptcy filing by the Detroit-based carmaker.